Essex County Council is set bring the running of its recycling centres and waste processing in house - despite this bringing the “highest level of risk”.

It represents a shift away from the current model that has been in operation since 2013 when Veolia was given the contract to support delivery of the council’s waste obligations.

This has involved operating and maintaining the council's household waste recycling centres and waste transfer stations – places where local waste collection vehicles deposit their waste for loading into larger vehicles.

The option results in the “highest level of risk transfer" to the council, but means the council will have more control over processes that could reduce residual waste.

The most significant attractive feature is the removal of the private sector profit margin, including on labour, which forms over 50 per cent of the integrated waste handling spending currently going to Veolia.

But one of the most apparent risks relates to the potential transfer of staff from the contractor to ECC under the Transfer of Undertakings (Protection of Employment) Regulations (TUPE) and the associated costs.

Such staff transfers may lead to increases in employer liability costs.

The council has built up substantial waste reserves of more than £100 million, which it says are in place to smooth the impact of the increases in costs due to increases in population, volume of waste and landfill tax. Net contributions to the reserve in early years are expected to be balanced out by withdrawals later.

Although the waste operations would be brought in-house, waste haulage services, plant and equipment, including vehicles, operational plant and waste containers for efficient operation of the services, material marketing services and other services to meet the operational needs of the recycling centres, waste transfer stations and associated obligation would be done externally.

An council statement said: “Whilst the staff costs associated with the recommended option have been modelled, as we are not yet in due diligence, we cannot be clear on the current or future liabilities, which remains a risk.

“This includes costs associated with contractual terms which are both written and implied. There could also be an additional cost to integrate this workforce and their terms onto our current systems, previous changes have come with considerable cost and have had long lead in times, however this detail cannot be provided until further information is available.”